Oil's Bear Run Accelerates: Supply Glut Meets Peace Talk Jitters

WTI crude just took a $1.22 hit, sliding 2.01% to $59.52/barrel as oversupply fears resurface. The culprit? A perfect storm of inventory bloat, geopolitical shifts, and market positioning.

The Numbers Tell the Story: U.S. crude inventories dropped 3.426M barrels (bigger than expected), but the API data shows a 4.4M barrel build—mixed signals typical of a bearish market. At 424.2M barrels, stockpiles sit 5% below the five-year average, yet China’s been hoarding like crazy. Beijing’s crude surplus hit 690K bpd in October, up from 570K in September.

Here’s the Kicker: Trump’s team is now pushing a 28-point peace plan with Russia. If Ukraine ceases fire, Russian oil floods back—and that’s exactly what markets are pricing in right now. Moscow’s already bleeding: shipments to China, India, and Turkey dropped 47%, 66%, and 87% respectively. Those tankers? Half are sailing without a confirmed buyer, forcing Russia into fire-sale pricing.

The Forecast Doesn’t Help: Goldman Sachs projects a 2M bpd global surplus by 2026. The International Energy Agency warns the glut could be worse than anticipated. Add Fed meeting minutes coming soon (could spike the dollar and further pressure oil), and you’ve got a recipe for continued downside.

Bottom Line: Oil’s caught between structural oversupply and peace talk headlines. Until geopolitical clarity arrives, expect consolidation at lower levels.